STRS FLASHBACK - 7 Years Ago - Betty turns up the heat another notch on Herbie while the legislators start talking the "r-word" (resignation)!

From John Curry, June 18, 2010

“Your public comments have been troubling and insensitive, angering many for the apparent lack of recognition of the issues and their consequences. ... As the Board’s ambassador, you must treat their concerns, as well as those of the legislature and the public, with the respect they merit. Any lack of professional demeanor in dealing with the people we serve is completely unacceptable.”

Betty Montgomery - State Auditor

State auditor blasts teachers’ retirement director

Canton Repository, June 19, 2003
By PAUL E. KOSTYU Copley Columbus Bureau chief

COLUMBUS — Ohio Auditor Betty Montgomery says the executive director of the State Teachers Retirement System abused his authority when he awarded nearly $1 million in bonuses to non-investment staff.

Those 65 bonuses ranged from $52,500 to Robert A. Slater, the deputy director of finance, whose annual salary is $150,000, to the supervisor of the copy center who got a $1,367 bonus on top of an annual salary of $45,580. The average bonus was $13,670.

STRS members, legislators and others have accused the director, Herbert Dyer, and the board of going on a spending spree over at least the past three years that used more than $15 million for staff bonuses, artwork and travel to places such as Alaska and Hawaii. The spending came at a time when the system’s investments plummeted by $12.3 billion and health-care contributions by retirees jumped significantly.

A contingent of retirees and others are expected at a STRS board meeting Friday to complain about the treatment they have received from the director, Herbert Dyer, and board members. They also are expected to criticize the board’s spending habits. The board’s meeting began Wednesday night.

“Mr. Dyer was given some great discretion in awarding bonuses,” said Eric Hardgrove, a spokesman for Montgomery, who as Ohio’s then-attorney general, sat on the retirement board. “Unfortunately, what he had done has not honored that trust. Given the economic climate, this needs to be reviewed.”

Hardgrove said Montgomery “does not shirk her responsibility,” but that she placed her trust in Dyer. The spending of the board and Dyer became a particular concern when the board began requiring retirees to pay more to receive their health-care benefits, he added.

“We need some serious re-evaluation” of policies, Hardgrove said.

Montgomery rebuked Dyer in a letter late last week. She said his attitude in dealing with members of the system, legislators and other stakeholders has been “nonresponsive, abrupt or even condescending.” She said it must change.

“I have seen it myself in your written correspondence and I know my current Board representative (Mary Beth Foley) has discussed this with you,” Montgomery wrote.

Two lawmakers who sit on the Ohio Retirement Study Council, which has oversight of the state’s five retirement systems but does not oversee the day-to-day operations of the five boards, have called for Dyer’s resignation. Sen. Kirk Schuring, R-Jackson Township, and Rep. Michelle G. Schneider, R-Cincinnati, have said Dyer has lost the confidence of the members of teachers retirement system.

Rep. John Boccieri, D-New Middletown, has called for an audit of the board’s books.

Dyer has refused to step down.

Montgomery did not ask Dyer to resign.

Hardgrove said Foley will make a statement on Montgomery’s behalf at Friday’s meeting. He said Foley and Montgomery “have been talking a lot about it. She is aware of the calls for his resignation. The board meeting is the best place to address that. Whatever action is taken, she does not want to harm the funds.”

Attorney General Jim Petro and Ohio Superintendent of Schools Susan Tave Zelman also send representatives to STRS board meetings as ex-officio, nonvoting members.

J.C. Benton, a spokesman for Zelman, said it is premature to ask for Dyer’s resignation but “the board should take a solid look at his performance.” Zelman’s representative on the board, Steven Puckett, will request the same data STRS supplied to Chillicothe Superintendent Dennis Leone, who triggered the investigation of the board’s spending, Benton said.

Benton said Zelman recognizes the need for performance incentives, but wants the board to review its travel and other policies. He said Puckett also will check what investigatory options the Ohio Retirement Study Council has before deciding whether to back a change in state law to allow Inspector General Thomas P. Charles to investigate the retirement boards.

“Zelman is most definitely in favor of increased accountability,” Benton said.

Kim Norris, a spokeswoman for Petro, said he “was extremely aggressive” about pursuing a change of travel policy when he was auditor and that led to changes. Apparently, policies need to continue to be examined, she said.

She said Petro supports performance bonuses, but those at STRS “appear to be out of line.”

Norris said Petro has not taken a position on whether Dyer should resign or whether the inspector general should be able to investigate the state’s retirement boards. The “general feeling” is that a role for the inspector general “is not necessary,” she said.

Montgomery said she regretted having to write the letter to Dyer, but “your public comments have been troubling and insensitive, angering many for the apparent lack of recognition of the issues and their consequences. ... As the Board’s ambassador, you must treat their concerns, as well as those of the legislature and the public, with the respect they merit. Any lack of professional demeanor in dealing with the people we serve is completely unacceptable.”